Turning 15 Minutes Into Big Dollars At The Bar

While an evening at a bar or a nightclub is always a fun time — until the next morning, that is — paying for the drinks consumed during said night out is almost never a good time. And it can be a real bummer if one happens to be at a crowded bar.

The experience breaks down into two variations.

The first involves a series of wild gesticulations to get the bartender or waitress’ attention, followed by an awkward exchange of a plastic card or a handful of bills for the pay-as-you-go type of customers.

Option two involves opening up a tab on your card for the evening — often surrendering it entirely to sit in some crevice or cubbyhole behind the bar for a few hours.

Obviously neither is a good experience for a customer — no matter the reason and no matter how you cut it.

But whatever the reason, Rooam CEO and Co-Founder, Junaid Shams, told PYMNTS in a recent interview that the odds are largely stacked against a fast checkout, since the average time to settle a bar tab is 15 minutes.

And that’s not just a bad situation for the consumer, Shams noted, it is also a tremendous loss for the bar, particularly around closing time.

“A few weeks ago, my girlfriend and I stepped into a bar for a late drink at around midnight. The bar had just announced last call, so theoretically we had half hour to get a drink. But we didn’t, because the bartenders didn’t serve a single drink during that entire 30 minutes — they were too busy settling up the tabs for patrons.”

Lose-lose.

That there is an obvious problem to be solved, Shams said. The customer doesn’t want to wait, the bar doesn’t want to lose out on sales and no one involved in the transaction really wants the bar to have to be responsible for customers’ cards or card data for the evening.

Rooam thinks it has cracked the code that makes it possible for a tab to be opened and “run” in real time.

Using a mobile app, of course.

“We are a mobile platform that integrates most existing point-of-sales systems, and by integrating we allow guests to open, view and close their tabs directly from their [phones]. It doesn’t require any additional hardware; it is basically the exact same flow as the bar has with its credit card system.”

To make money, Rooam charges the consumers — a $1 base fair for the service — no matter how large the tab is.

And while Shams acknowledges they are not the first firm to come up with an idea of helping bar patrons get the heck out of dodge when they want to leave, Shams says that they are the firm that took the time to build it out right and develop an ignition strategy that makes sense.

“In this space, we’ve seen TabbedOut come and go, Dash come and go. TabbedOut wasn’t PCI compliant; Dash required an iPad to be attached to every single terminal for anyone to be able to use it and new hardware that the bartender had to learn to use,” Shams said.

So, Shams said, he asked his team: What do we have to do to solve the friction problem for all and seamlessly integrate into a POS system? And do it in such a way that a bartender has zero learning curve.

Something Shams confessed “took a long time” to build.

Two years, to be exact. But in that time, Shams noted, Rooam built a mobile checkout solution for bars and nightclubs that is fully PCI compliant and tokenizes data, is free for bars and can be plugged into most POS systems in less time than it takes for a bartender to settle all of the “Last Call” tabs.

“We don’t want to give bar operators any reason to say no.”

Building for Merchant Convenience

The main challenge in the building process for Rooam, Shams told us, is that they had to build a platform that was equally attractive for merchants and consumers — which is actually an incredibly hard thing to do.

Restaurants and bars, he noted, are very hesitant to take on tech upgrades that don’t make a direct contribution to the bottom line — and is observable in “the extremely slow uptake of EMV among hospitality providers,” Sham noted. That, combined with the high rates of turnover among employees in the industry means it’s just wholly impossible to require staff to learn two things: one for regular purchases at the bar, and another that runs through a separate tablet for mobile purchases.

“Since the configuration of each location is completely different, what we do within our installation process is to have our onsite support tech customize the Rooam set-up to match the existing flow within the bar 100 percent.”

What that means, Shams explained, is that it’s irrelevant if the bartender is new or has never heard the word “Rooam” before, since it’s all integrated within their bar’s POS. The tickets created through Rooam appear on the exact same screen and function in the exact same way as they would if the customer had handed over a credit card on which to run a tab.

“So let’s say a user goes up to the bar and orders a gin and tonic. The bartender will ask them if they want to run a tab, and all the user has to say is, “I already have a tab open, and tell them their name. When the bartender turns around, they will see a ticket in there and input the order, just as they usually would.”

When the customer wants to leave, they settle up their tab and go — on their app. If the customer forgets, the bartender can close the tab for that customer when they leave. If the bartender forgets, the Rooam system automatically closes the tab within 24 hours and clears the payments.

The goal, he said, is to make it easier on everyone involved.

The Solution of the Future

Shams also noted that Rooam’s platform doesn’t just build a better experience for merchants and consumers — it also adds to the bottom line. Customers tend to buy more drinks when it is easier to do so. In one of their partner merchant bars, non-Rooam customers spent $28 on average. Rooam customers spent $48.

Customers also tend to tip a little bit better when using Rooam. Users are given an area to add tips and are given a few options, the lowest one being 18 percent (which is standard tipping for bartenders). Most Rooam customers tip in the 20 percent range.

Rooam’s solution also offers bar patrons and owners a more secure way to handle payment — by not making them deal directly with card numbers.

“We just send a token that acts as a payment type to the point-of-sale system. We use Braintree as our payment processor, and as soon as a user inputs their card information into our system, that information is passed directly to Braintree, and we just get a token. Neither we nor the merchant ever see the card details.”

What’s Next

These days, Rooam is located only in D.C. — where hitting the bars is a non-partisan activity — and available in 31 locations. They are rolling out another 74 in the next 60 days.

“All four of the big restaurant groups in D.C. have all signed up, which has been remarkable.”

From there, the goal within the next six to nine months is to launch in Miami, Chicago and Los Angeles, where they are already building relationships with the POS vendors.

“Market density is very important to us. If you are a user and you are in one of these cities and you only see five to 10 locations, you aren’t going to use it as much if you can’t get a lot of favorite destinations on it. But if we can get 100 to 150 locations in a city, that is when the real change will come. That is what we are seeing in D.C. right now — where users are actually tapping into the app four to five times a night because they are bar hopping.”